NEW YORK (AP) — The first big batch of summer earnings reports from U.S. companies is making waves on Wall Street after beating analysts’ expectations, but many are canceling out. This leaves stock indexes relatively static and near their record highs from Tuesday.
The S&P 500 slipped 0.1% and moved slightly away from this is a record level fixed last week. The Dow Jones Industrial Average was down 5 points, or less than 0.1%, as of 10:45 a.m. Eastern Time, while the Nasdaq Composite Index was down 0.1%.
These modest movements, however, masked large fluctuations occurring beneath the market’s surface.
Goldman Sachs, for example, jumped more than 4% in early trading after the bank reported a profit for the July-September period that beat analysts’ expectations. But its stock quickly erased everything and fell to a modest loss before returning to a gain of 1.2%.
Goldman Sachs enjoyed strong growth this summer in its business that offers loans to clients for stock trading, among other things, even as its CEO David Solomon said it faced a “complicated operating environment” created by many uncertainties.
Expectations for profit growth are high among all kinds of U.S. companies. Analysts expect overall growth of nearly 30% for S&P 500 companies over the summer from a year earlier, according to FactSet. If they are correct, this would be the third consecutive quarter of growth above 25%.
And companies need to achieve these high numbers to justify record increases in their stock prices, despite widespread concerns on Wall Street about high inflationincrease bond market pressure and the war with Iran.
UnitedHealth Group’s stock has fluctuated widely even though it reported higher profits and revenues for the latest quarter than analysts expected. The healthcare company also raised its full-year 2026 profit forecast.
After climbing as much as 5.6% shortly after trading began, it wiped it all out and fell 0.3%.
More firmly in the loser column is Wells Fargo, whose stock fell 1.9% after the bank reported revenue for the latest quarter that was weaker than analysts expected. CEO Charlie Scharf cited, among other things, declining revenues from his venture capital investments.
But Scharf also said that “our data shows that our individual and business customers are doing well” despite the uncertainty surrounding the economy and recent surveys showing how discouraged Americans are about their finances. This could bode well for the economy as a whole and the future profits of companies across all sectors.
At the nation’s largest bank, JPMorgan Chase CEO Jamie Dimon highlighted “high asset prices” as one potential risk to the economy. He also mentioned high inflation, rising interest rates and “geopolitical conditions.”
“These forces may be manageable, but we remain prepared to face a wide range of consequences,” he said.
JPMorgan Chase stock rose 0.6% after swinging between gains and losses in the morning. It reported a profit for the latest quarter that was weaker than analysts expected, but it also gave a net interest income forecast for the current quarter that beat Wall Street’s estimate.
Outside of earnings reports, stocks in the computer chip sector have been among the strongest.
Concerns have been raised for a while on whether chip stock prices have soared too high in the frenzy surrounding artificial intelligence technology, and concerns have further increased following reports that the Chinese memory chip maker CXMT is making advances that could challenge industry heavyweights like Micron Technology of Boise, Idaho and Samsung Electronics and SK Hynix of South Korea.
Micron fell 4.6% and was the heaviest weight in the S&P 500. South Korea’s Kospi stock index, meanwhile, fell 5.5%.
In the bond market, Treasury yields fell after oil prices fell. The 10-year Treasury yield fell to 5.22% from 5.24% Friday evening. Trading on the US bond market was closed on Monday for the holiday.
Yields fell following a 0.8% drop in the price of Brent crude oil to $105.86. Oil prices have yo-yoed due to uncertainty over when the war with Iran will allow the global energy industry to return to normal.
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AP Business writers Chan Ho-him and Matt Ott contributed to this report.
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